News, Insights and Best Practices for Manufacturing in Mexico

Getting supply chains right in Mexico

11 Nov 2013

Category: Logistics Management, Manufacturing in Mexico

A manufacturer's supply chain can be a fragile thing. A natural disaster can leave airplanes grounded and an accident on roadways can disrupt the delivery of goods. Expanding to Mexico allows manufacturers to tighten up their supply chains and reduce their time-to-market. Being able to adapt to changes in the supply chain ecosystem is one of the greatest benefits manufacturing in Mexico provides North American companies. 

Businesses that have offshored their production processes before may think they can move to Mexico and automatically get started building relationships with suppliers and moving goods in and out of the country. Yet just because Mexico is geographically close to the U.S. and is a global manufacturing leader doesn't mean building an adaptive supply chain in the country is a piece of cake. Establishing a flexible chain that can quickly react to unforeseeable changes requires a deep understanding of Mexico's import and export laws and Mexico's changing infrastructure. To get the supply chain in Mexico right the first time, manufacturers need to partner with an experienced shelter company.

Needing to stay informed
Delays in the supply chain can make or break production and delivery schedules, so manufacturers must be able to sustain their operations when issues occur. This isn't always easy - in fact, creating an optimized, flexible supply chain can be a downright challenge. According to Manufacturing.net, one of the biggest aerospace manufacturers in the world was two years behind schedule in 2010 because its supply chain was - necessarily - complicated.

When manufacturing in Mexico, businesses automatically complicate their supply chains, but that doesn't mean they have to get into an adverse situation. However, Manufacturing.net suggested that no matter how convoluted the supply chain is, if it lacks of transparency the manufacturer is only going to experience challenges. By increasing the supply chain's visibility, which includes consistent communication with suppliers and keeping logistics on track, manufacturers can quickly adapt to changes and stay on schedule.

In a blog for Oracle, Maha Muzumdar, vice president of supply chain marketing at Oracle, suggested making real-time insights a high-priority strategy can reduce inventory and logistical expenses as well as help supply changing demand. According to Muzumdar, by having a complete view of the supply chain, manufacturers can have stronger control over their success.

"Companies then can adjust pricing and promotions strategies to shape demand, move additional product quickly, drive revenue growth, or further expand margins for a high-demand product with limited market supply," Muzumdar wrote. "The key is to have the foresight to leverage opportunities and mitigate challenging events so that your business not only survives, but succeeds."

However, manufacturers can't do all of this by themselves after they expand to Mexico. Being able to rapidly respond to changes - no matter what part of the supply chain is influenced - is easier to do with shelter company assistance. Having a transparent supply chain isn't the only benefit from shelter company involvement: Mexico has specific import taxes manufacturers need to follow, and shelter companies can help manufacturers comply with these regulations to keep their supply chains moving.

 

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